Key Points:
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CFTC chair warns future regulators could reverse crypto progress
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New taxonomy marks shift away from Gensler-era enforcement approach
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This comes as stablecoin reward restrictions spark market and industry concerns
Gary Gensler has to be one of the most polarizing figures in the United States when it comes to crypto.
During his tenure as the chief of the U.S. Securities and Exchange Commission (SEC) from 2021 to 2025, the SEC pursued aggressive enforcement, filing lawsuits against exchanges like Coinbase (NASDAQ: COIN) and Binance, and frequently warning about investing in crypto.
Once in a hearing in front of a Senate Committee in 2021, Gensler famously called crypto finance "rife with fraud, scams and abuse."
"Frankly, at this time, it's more like the Wild West or the old world of "buyer beware" that existed before the securities laws were enacted,"he said.
Gensler repeatedly emphasized investor protection but was criticized for offering limited regulatory clarity.
But now, in 2026, things have changed majorly. The regulatory framework is much clearer, if not firmly established, than it was in 2021.
However, Michael Selig feels the progress needs to be foolproof from a reversal.
Related: Gary Gensler hints at SEC departure, says he is 'proud to serve' the agency
CFTC chair flags risk of policy reversal
Selig was appointed in December 2025 to lead the Commodity Futures Trading Commission.
He recently struck a cautious tone at the Digital Asset Summit 2026 .
Selig said regulators are close to passing key legislation, particularly around stablecoin yield, noting "breakthroughs" tied to the CLARITY Act. But his biggest concern wasn't the present. It was the future.
"Legislation is very important to future-proof what we are building at the SEC and the CFTC...My biggest concern is that three or four years from now, the next Gary Gensler coming in and he takes an ax to everything we've built, and we can't allow that to happen,"Selig said.
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Taxonomy brings clarity
Selig pointed out that one area where progress is visible is digital asset classification.
New guidance from the SEC and CFTC introduces a formal taxonomy , dividing crypto into categories like digital commodities, stablecoins, tokenized securities and NFTs.
According to Galaxy's Alex Thorn , this represents a clear break from the Gensler era.
Rather than relying on enforcement, regulators are now attempting to define the market structure upfront, giving companies clearer pathways to compliance.
"In many ways, it's the single most concrete exposition of the [Paul] Atkins SEC's reversal of the prior SEC's approach under Chair Gary Gensler, which itself was characterized by a failure to substantially conduct rulemaking or guidance for market participants, an inability for market participants to register or achieve licenses, outright hostility, and myriad lawsuits."
He added that until Atkin's tenure, the latest document will "explicitly nail that coffin shut."
Stablecoin rewards debate shakes confidence
But just as clarity emerges, new tensions are surfacing.
The latest draft of stablecoin rewards surfacing across the Internet on March 24 has reignited uncertainty. The proposal would prohibit offering yield "directly or indirectly" on stablecoins if it resembles interest.
It also bars incentives considered economically equivalent to interest, applies rules across exchanges and brokers, allows only limited activity-based rewards, and tasks regulators with defining the framework within a year.
Markets reacted quickly. Shares of Coinbase and Circle dropped sharply following the news, reflecting investor concerns about the impact on business models tied to stablecoin adoption.
Related: Coinbase, Circle stocks tumble as stablecoin rewards recieve no 'clarity'
This story was originally published by TheStreet on Mar 24, 2026, where it first appeared in the Policy section. Add TheStreet as a Preferred Source by clicking here.
